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Inflation was at a 6 -year low in March.
After relief from high interest rates, there is also relief from inflation. A research report by Bank of Baroda (BOB) estimates that the retail inflation of April may be below 3%.
Official data will be released on Tuesday (May 13) next week. The report states that in recent weeks, food items, especially the prices of vegetables, have decreased by up to 34% and the prices of pulses by 15%.
However, the prices of edible oil have increased by 30%. Its effect will hardly be seen on inflation because the most sun flower oil has become expensive, whose inflation is less than 1% in the index.
The hope of getting loans and cheap increased, decision in June
The report said that due to decrease in inflation, there will be scope for the Reserve Bank to reduce policy rates and reduce. The June meeting may reduce the repo rate more than the first (0.25%). Due to low heat in tomatoes, onions, potato -producing states, production will increase, prices can decrease further.
Vegetarian plate became 4% cheaper in April: CRISIL
According to the rating agency Crisil’s ‘Roti Rice Report’, the cost of the normal vegetarian plate in April fell by 4% to Rs 26.3. The cost of the plate is reduced by 1% on a monthly basis. According to the report, the plate has become cheaper due to the decrease in the prices of vegetables.
Inflation was at a 6 -year low in March
Retail inflation was reduced to 3.34% in March. Earlier in August 2019, inflation was at 3.28%. It has come to a 5 -year -7 -month low. A month before March i.e., inflation was at 3.61% in February.
About 50% contribution to inflation baskets is food and drink. Its inflation has come down from 3.75% to 2.67% on a month-month basis. At the same time, rural inflation has come down from 3.79% to 3.25% and urban inflation has increased from 3.32% to 3.43%.
How does inflation grow?
Increased inflation and the event depends on the demand and supply of the product. If people have more money, then they will buy more things. Buying more things will increase the demand for things and if there is no supply according to the demand, the price of these things will increase.
In this way, the market is in the grip of inflation. Simply put, excessive money in the market or shortage of things causes inflation. On the other hand, if the demand will be reduced and more supply will be reduced.
CPI determines inflation
As a customer, you and we buy goods from the retail market. Consumer Price Index i.e. CPI does the work of showing changes in the prices associated with it. The CPI measures the same for goods and services that we pay for goods and services.
Crude oil, commodity prices, manufactured costs, also have many other things which have an important role in fixing retail inflation. There are about 300 items, based on the prices, the rate of retail inflation is fixed.
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